With more than 200 million active users in India, WhatsApp has become the most popular chat application in the country. The company wants to now be the leader in the digital payments space and take on competitors like Paytm and Google Pay.
In latest developments, WhatsApp has now decided to comply with the Reserve Bank of India (RBI) guidelines on data localization. WhatsApp will now build a system to store payments data of Indian users locally in the country. RBI had mandated all payments firms in the country to enforce the local data storage rule from October 15, 2018.
In a statement, WhatsApp spokesperson said that almost 10 lakh people in India are currently testing WhatsApp payments feature to send money to each other. The platform uses a simple and secure way to transfer money. In response to the payments data circular issued by the RBI, WhatsApp will be storing payments-related data on local servers in India.
To roll out the digital payment services in India, these tech companies will have to take regulatory approvals from the National Payments Corporation of India (NPCI) and the RBI.
While WhatsApp has taken a step in the right direction, other payment firms have been requesting for deadline extension to comply with the RBI mandate. Some of these companies are also requesting RBI to consider allowing a copy of the data to be stored in India instead of the complete localisation of data. The digital payments ecosystem in India is thriving and some of the other tech companies in the fray include the likes of Google, Amazon, Visa, and MasterCard. However, these companies have registered their objections on some of the clauses in the new mandate.
Indian payment firms including Flipkart-backed PhonePe and Paytm have openly supported the RBI’s decision. Google has agreed to the meet all the compliance requirements as laid out by the Indian regulators, but the search giant is now requesting extension of the deadline till December 2018.
Arun Jaitley, India’s Finance Minster and BP Kanungo, Deputy Governor of RBI had a meeting on Tuesday to discuss the data localisation norms. Last month, the messaging platform had appointed Komal Lahiri as a Grievance Officer for India. WhatsApp was recently under the radar for not doing enough to curb the menace of fake news. This compliance step towards data localisation is going to go down well with the authorities in India.